The analysis of the business strategies of Gene one - Research Paper Example

?Running head: PROBLEM SOLUTION: GENEONE Problem Solution: GeneOne Goes Here of Phoenix Problem Solution: GeneOne The study reveals the present situation and condition in Gene One which has entered into the biotechnology industry and specializes in technologies which eradicates diseases in potatoes and tomatoes. Firstly a brief description of the situation in Gene One is presented. The situation reveals that the company wants to attain an annual growth of 40% and subsequently tries to launch a new IPO in the market. Growing opportunities in the field of biotechnology provides great opportunities for the company. However some of the stakeholders which are expected to get affected in the process are the company’s customers and suppliers as well as its employees. It is customers are in a gainful position because of improved and enhanced quality of products, suppliers are also expected to gain because of bulk purchases from the company. However, employees would be affected because of organizational changes and subsequent changes in their roles and responsibilities. The end visions which have been set are to increase organizational performance by 40% and establish a new IPO. However, this can be achieved only through the proper implementation of transformational leadership styles. Leadership would play the important role of guiding employees towards the new direction set by the company. In this contest a general enhancement of employee performance is recommended through training programs and evaluations. A suitable alternative solution has been presented in case of failure of the primary targets. A revised target of 20% is set and technical skills training is called for in this context. Additionally, failure to avail the right technical skill and expertise is compensated through training existing employees to adopt the new technologies. Moreover the effectiveness of leadership would be evaluated through its effectiveness in handling employee grievances arising out of the change process and implementation of effective change management tools and techniques. Situation Analysis Issue and Opportunity Identification Sharp increases in the stock indices in Wall Street coupled with growing interests in the field of biotechnologies is the most prominent factor which has called for the growth of the organization. Moreover frequent changes in leadership in the Food and Drug Administration have further increased investors confidence in the same. Thus the board has made it a point to increase the company’s growth target by 40%. However this is not possible to happen without the company being made public in the coming three years. However, this is not free from some hurdles. It involves costs in the form of IPO capital for the new developments, costs in the form of advertisements and huge marketing expenses to retain success in the market. There is also an issue that investors have been becoming increasingly cautious about the biotech investments because of a prevailing scandal in human genome sequencing. Despite of the fact that it is a different company this is sure to create negative publicity for the industry at large. This would have to be overcome by showing that it possessed the leadership capacity and technology which was required to operate in future. Stakeholder Perspectives/Ethical Dilemmas The idea was to develop two new breakthrough technologies along with the development of six new and innovative products which would be based on the current technology. However, this would necessarily mean need for new technical expertise and skills which would consequently make the prevailing human expertise obsolete and redundant and this would consequently have impact on the employees in the organization. Changing the technology application and usage might call for job cuts and company downsizing. However, the situation would confront with certain ethical dilemmas and constraints. Job cuts would spoil the reputation of the company largely and abrupt changes in the present job structures and employee roles and responsibilities would also generate discontentment among employees. The company would have to provide adequate compensation for employees who were leaving the organization. Additionally the present employees would suffer through insecurity and have apprehensions about the job loss of their co-workers. Thus they would have to be compensated through adequate incentive systems for motivation and inspiration. Customers could enjoy greater benefits because of the improved quality of products and services by the introduction of new technologies. However, there could be a change in the target market because of which the existing customers could suffer a loss. There would be increase in demands through the desire to attain new targets and standards. Thus suppliers would enjoy benefits through bulk purchases from the company. The new business initiatives and direction could benefit them in a number of ways. They could also benefit through increased business opportunities and interests. However the new initiative of the company to attain greater penetration and targets could put some constraints on the stakeholders with regards to their powers to bargain. Bulk purchases would have to be compensated through lowered costs. Also the company would have to ensure that high standards of quality were maintained by the suppliers. Problem Statement Gene One seeks to achieve growth targets of about 40% in order to keep pace with the growing demands in the market. The opportunity which shows is the rising stock indices in Wall Street and an increased demand and preference for the sector of biotechnology. However, this new targets cannot be achieved without the organization being made public. This is the reason why Gene One seeks to go public within the next three years. However some of the present constraints in the company are the need for IPO capital for the new development initiative, advertisements and hard core marketing initiatives for remaining competitive in the market. It is evident that the new business initiatives could not be realized through the existing technologies and business model. New technologies would have to be adopted and with this would be required new skills and expertise for the same. However, there were apprehensions that a complete change in the business model would invite resistance and opposition from the present employees as demand for the skills and expertise could undergo a rapid change and the prevailing skill and expertise in the organization might become redundant. End-State Vision The vision is to increase productivity and performance of the company by 40% due to the increase in demand arising in the market. This requires the company to become a public organization by launching its new IPO within the next three years. However, there are few constraints which come in its way of realising the vision. In order to launch an IPO Gene One would have to prove itself over a continuous period of time that it has a desired leadership and organizational capabilities to be successful in becoming a public entity. It previous performances and future growth potential would also have to be explored in this context. These would have to be evaluated in terms of its present technologies, employee performance and productivities, leadership capabilities, infrastructures, and growth trends in the recent years. Alternative Solutions Alternative solutions have been developed in case the present goals and objectives fail to be realized. Firstly, if a growth of 40% cannot be realized a revised growth rate of 20% has been set. In that case a proper system of performance measurement and planning is desired in the company and fixed targets would be set in favour of each individual employee. Performance management systems would bring forth the efficiencies and drawbacks in employee performance hat would have to be addressed. The second alternative is developed if the present requirement to introduce new technologies fails. It is possible that the required expertise and skills for the new technologies may not be available within a short period of time. Moreover initiating a new technology is a costly process and also requires adequate infrastructures for the purpose. Thus the desired alternative option in this case is to train the employees on the prevailing technologies so that their performances get enhanced and this reflects through the overall performance and productivity of the organization at large. It is evident in the case study that the board has decided to replace existing employees with new ones. This is absolutely necessary with the introduction and adoption of new technologies and initiatives at the workplace. However, replacement of candidates might not be a suitable option as it would require downsizing of the present workforce and generation of grievances and resistances from existing employees. In such a situation an effective solution would be to train the present employees on the new technologies and skills instead of replacing them immediately. Analysis of Alternative Solutions The first option of revising the targets from 40% to 20% is provided with maximum importance because high performance is the factor most necessary for showing the worthiness of the organization as being capable of becoming a public entity. The necessary factor is to show a continuous growth path of the company in order to qualify as possessing the required capabilities for becoming a successful public entity. An upliftment of the productivity and performance level of employees is considered crucial for the general enhancement of the company performance at large. They must be provided with extensive training to improve performance with the aim of realising the desired target of 20%. The idea is to realize and explore the full potential of present employees instead of replacing them with new ones. The third option is also crucial but less compared to the above two. It is applicable when it is absolutely necessary to adopt the new technologies but not possible to reduce the existing workforce. This means that it is necessary to train the company’s existing employees on the new and innovative technologies. Risk Analysis and Mitigation Strategies An effective planning requires a business leader to not only plan for the desired objectives but to also analyze the various risks that may emerge in the process. This requires considerable visionary traits from the leader so as to foresee the risks and devise alternative strategies in order to ensure that the objectives are met and the company moves on a path of growth. The table shown above displays the various alternative solutions in the event of alternative strategies being deployed. An effective leader must formulate contingency planning in the form of a sensitivity analysis that would help in garnering the present value of the cash flows in the event of three possible scenarios of normal, optimistic and pessimistic scenarios. Effective capital budgeting techniques should be used to ensure that the financial model and the revenue model take the risks into account while forecasting the cash flows. Hedging strategies must be used to counter the inflationary trends in the economy. The company should also engage in forward contracts in order to minimize the risk due to currency conversion rate fluctuations. A contingency fund must also be established so as to help meet the urgent objectives and to ensure that cash crunch does not come in the way of expansion plans in the event of sudden downturns in the external or the macroeconomic environment. Finally a leader must also ensure responsibilities with clear cut targets as well as responsibility and accountability in order to ensure that the objectives of the organization are fully catered and the company emerges successful in its long term objectives and establish itself as a market leader in the upcoming years. Optimal Solution The table 5 illustrated above shows the contingency planning for Gene one in order to ensure successful achievement of the objectives. The first step in this regard is to formulate goals based on SMART objectives so as to ensure quantification and measurement of the goals and objectives set up by the organization. In addition to the finance team preparing revenue models and forecasts it is also essential that there is a proper plan to ensure that the sales figures that are quoted in the revenue forecasts meet the numbers set as targets. This requires ensuring that there is a focus on the market and the customers. An effective leader must ensure that there is proper planning and co-ordination among the various departments of the organization. This would help in formulating plans that can help in generating efficiency for the organization. However, in addition to planning and execution, it is also necessary to have a mechanism for monitoring and evaluation of the objectives so that gaps in the process are identified and counter steps are taken to ensure that the objectives are being met. The use of a Balanced Scorecard technique is a useful tool in this regard as the tool helps strategists to not only evaluate the financial strategies but then non financial strategies as well. This would help the company to identify any issues or discrepancies and also ensure regular and continuous monitoring to ensure final achievement of the goals of the organization (Balanced Scorecard Institute, 2011). There should also be fixed accountability in order to ensure that the company achieves its objectives in the long run. Implementation Plan The revised targets can be achieved only through the application of effective leadership styles. In this context transformational leadership styles have been recommended for the purpose. The idea of making the organization public is necessary to evoke suspicion and resistance from the employees as it would require a dramatic change in the organizational structure and culture. Moreover the present roles and responsibilities of the employees are also likely to undergo dramatic change. Employee resistances would have to be handled through effective transformational leadership styles. A transformational leadership style is especially applicable for motivating and inspiring employees in the right direction and path. The revision of individual employee targets and productivity would necessarily mean a dramatic change in the organizational culture and structure. Sudden revision of targets and performance would have to be compensated with adequate compensation and incentives. Moreover, continuous monitoring of performance would be needed by the line managers. A change in the organization structure and culture could be possible only through the application of the transformational style of leadership. Evaluation of Results Firstly directing organizational culture towards a high growth and performance organization would have to be evaluated through the changes in the business performance and targets in a year. Increase in the business performance would be the actual reflection of the growth and productivity and consequently the success of the strategies. Individual performance of the employees would have to be evaluated through the application of proper system of performance measurements in the organization. Performance measurements would be done against all aspects of the roles and responsibilities associated with the job. Technical skills, interpersonal skills as well as behavioural skills would have to be evaluated through the system. A strategy would be to set individual targets for every employee and then measure his performance in comparison to the target. Employees achieving the target would be compensated for high performances while those performing below the standards would be provided additional training based on his individual drawbacks and loopholes. A complete change in the leadership styles would also be evaluated through the same system of performance management. The change in the employee productivity and performance would be an actual reflection of the success of the leadership styles in the organization. The productivity increases arising out of the changing dynamics of the organization would be the success of the transformational style of leadership. Conclusion The analysis of the business strategies of Gene one shows considerable opportunities for growth considering the high growth phase of the industry segment that the company operates. However, in order to realize the ambitious goals of the company it is very essential to ensure organizational excellence. This calls for effective leadership skills on the part of the leader of the organization. The business leader must essentially have the vision and long term planning skills in order to ensure business growth. The leader must follow a democratic approach in dealing with the employees. This would ensure participation from all the quarters of the organization that would instill greater trust and confidence among the employees. In addition to this effective leadership in the organization would also ensure greater job satisfaction that would lead to motivation among the employees of the organization. This is very important as employees or the human resources are the ultimate assets for any organization and the success of an organization is highly dependent upon the performance of the workforce. Finally, there should be careful planning and co-ordination as well as risk management techniques that can help in monitoring and evaluation. An effective leader must also ensure complete responsibility of the entire project so as to ensure long term sustainable competitive edge for the organization in the long run so as to help make Gene One a corporate giant as well as a formidable brand in the global market and help maintain sustainability and profitability in the long run. References Balanced Scorecard Institute. (2011). What is the Balanced Scorecard? Retrieved December 20, 2011 from http://www.balancedscorecard.org/BSCResources/AbouttheBalancedScorecard/tabid/55/Default.aspx. Table 1 Issue including Opportunity Identification Issue Opportunity Implications to Specific Concepts of Course Concepts Gene One’ target is to attain annual growth target of 40% because of the high demand in the market; however, this is not possible without the company being made public Sharp rising stock indices in Wall Street and increasing interest in biotechnology At Gene One, the CEO and his Board believe that to be at par with the increased demand and realize conservative yearly growth targets of 40%, Gene One is going to have to go public within the next three years High demand in stock markets Need for IPO capital, advertising and marketing for remaining successful Gene One possesses employees like Susan Wells who has myriad connections with political communities and the media The situation and time looks profitable but Gene One needs additional capital for IPO development, funds advertisement, and marketing if it is to remain successful. Employees having connections with the media Table 2 Stakeholder Perspectives Stakeholder Perspectives Stakeholder Groups The Rights, Interests, and Values of Every Stakeholder Group Employees Changes in roles and responsibilities would affect their performance in the organization. Moreover, changes in organizational structures would meant reducing the workforce of the company which consequently means job cuts and downsizing coupled with re-employment of new employees Customers Because of the changes in business objectives of the company, it is possible that existing customers would become obsolete and new customer base would have to be developed. However, prevailing customers could enjoy better value and quality of products and the company would have to pay special attention to customer care Suppliers Suppliers could be affected because of the company’s plans to change its strategies and business objectives. They could benefit because of increased demand and could also avail the advantage of bulk selling of products and consequently low costs. Table 3 Analysis of Alternative Solutions Table 4 Risk Analysis and Mitigation Process Risk Analysis and Mitigation Process Alternative Solution Risks and Probability Consequence and Severity Mitigation Strategies Revised growth rate of 20 percent in the event of unfavorable external uncertainties like downturn in economy Less than expected growth Unable to bear variable costs Unable to meet revenue expenditures Les growth would lead to unutilized capacity Company unable to pay salaries to employees Reduced morale and high turnovers Contingency planning to take care of uncertainties Quarterly or Monthly Reviews Fixing accountability and quantification of objectives with timelines Training Employees on Existing Technology Hampering the learning curve Reduced output Reduced Efficiency Setting up a contingency fund for giving importance to technology up gradation Table 5 Optimal Solution Implementation Process Deliverable Timeline Responsible Person Formulating the Revenue Model and Forecasting and SMART Objectives 2 Months Finance Manager, CEO and CFO Sensitivity and Scenario Analysis 1 Month Finance Manager and CFO Risk Management Strategy Formulation 1 Month Finance Manager and CFO Capital Budgeting and Hedging Strategy 25 Days Finance Manager and CFO Marketing Plan 1 Month Chief Manager Marketing and CEO Formulation of the Balanced Scorecard 1 Month CEO, CFO, President (HR), Manager Marketing Table 6 Evaluation of Results End-State Goals Metrics Target Attain a growth in revenue of 40% arising out of the increased demands in the market and rising indices in the stock markets Changes in annual productivity and performance Business performance Launch a new IPO of the company within the next three years; in other words make the company public Capabilities to prove that the company can succeed as a public entity Consistency in business performance over a duration of time Bring about change in the organizational culture and focus by directing all activities and strategies in the new desired direction, like directing employee activities and performances in the new direction. Generating overhaul in the leadership style to act as a driving force behind guiding the workforce to its new strategic direction Change in leadership style and performance Effectiveness and performance of leadership Introduction of new and innovative technologies required for the introduction of new products in the market due to increased demands for the same. Change the existing business model and functions of the company Productivity and output with the application of the new and advanced technologies Technological output and productivity Bring about increased benefits to the stakeholders and the society at large Benefits to the stakeholders Reviews provided customers, customers, suppliers and employees Read More